Ca 8:09-cv-00266-AG-MLG Document 9-2 Filed Page 1 of 20 · Case 8:09-cv-00266-AG-MLG Document 10 Filed 05/20/2009 Page 3 of 20 Ca 8:09-cv-00266-AG-MLG Document 9-2 Filed 05/18/2009

Case 8:09-cv-00266-AG-MLG Document 10 Filed 05/20/2009 Page 1 of 20Ca 8:09-cv-00266-AG-MLG Document 9-2 Filed 05/18/2009 Page 1 of 20

1 DA VID C. SHONKA FILED· SOUTHERN DIVISION CLERK, U.S. DISTRICT COURT

Acting General Counsel 2 MAY 202009 DAVID P. FRANKEL 3 ELIZABETH K. NACH

dfrankel~ftc.gov; [email protected] CENTRAL DISTRICT OF 4 Federal rade Commission BY

600 Pennsylvania Ave., N.W. 5 Mail Drop NJ-3212

Washin~on, D.C. 20580 6 Tel: (20~ 326-2812 (Frankel), -2611 (Nach)

Fax: (20 ) 326-3259 7

RAYMOND E. McKOWN (Local Counsel) rmckown~ftc.~ov 8 California ar o. 150975

9 Federal Trade Commission 10877 Wilshire Boulevard, Suite 700

10 Los An~ele1 CA 90024 Tel: (31 ~ 8 4-4325

11 Fax: (31 ) 824-4380

12 Attorneys for Plaintiff, Federal Trade Commission

13

14

15

16

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

SOUTHERN DISTRICT

17 FEDERAL TRADE COMMISSION

18 Plaintiff,

19 vs.

20 ROEX, INC., RODNEY H. BURRESON, and MARK

21 ALEXANDER,

22

23

Defendants.

Judge: Hon. Andrew J. Guilford

CASE NO. SACV09-0266 AG MLGx

rPROI OSED] MODIFIED FINAL ORDER FOR PERMANENT INJUNCTION AND SETTLEMENT OF CLAIMS FOR MONETARY RELIEF

24 The parties, Plaintiff Federal Trade Commission ("FTC" or "Commission")

25 and Defendants Roex, Inc., Rodney H. Burreson, and Mark Alexander

26 (collectively, "Defendants"), having stipulated and agreed in the Stipulation for

27 Final Order for Permanent Injunction and Settlement of Claims for Monetary

28 Relief to entry of this Order, and having requested that the Court enter the same to

Case 8:09-cv-00266-AG-MLG Document 10 Filed 05/20/2009 Page 2 of 20, .

Ca 8:09-cv-00266-AG-MLG Document 9-2 Filed 05/18/2009 Page 2 of 20

1 resolve all matters in dispute in this action, and Defendants having waived service

2 of the Summons and Complaint, the Court hereby enters the following fmdings and

3 Order.

4

5 1.

FINDINGS

This Court has jurisdiction over the subject matter of this case and

6 jurisdiction over all parties. Venue in the Central District of California is proper.

7 2. The Complaint states a claim upon which relief can be granted, and

8 the Commission has the authority to seek the relief it has requested.

9 3. The acts and practices of Defendants are in or affecting commerce, as

10 defined in 15 U.S.C. § 44.

11 4. Defendants waive all rights to seek judicial review or otherwise

12 challenge or contest the validity of this Order. Defendants also waive any claims

13 that they may have held under the Equal Access to Justice Act, 28 U.S.C. § 2412,

14 concerning the prosecution of this action to the date of this Order.

15 5. Each party shall bear its own costs and attorneys' fees.

16 6. Entry of this Order is in the public interest.

17

18

7.

8.

This Order reflects the negotiated agreement of the parties.

The Commission and Defendants agree that entry of this Order

19 resolves any and all disputes between them arising from the acts or practices

20 alleged in the Complaint in this action up to the date of entry of this Order.

21 9. The paragraphs of this Order shall be read as the necessary

22 requirements for compliance, and not as alternatives for compliance, and no

23 paragraph serves to modify another paragraph unless expressly so stated.

24 ORDER

25 DEFINITIONS

26 For purposes of this Order, the following Definitions shall apply:

27 1. "Roex" ("Defendant Roex") means Roex, Inc., a California

28

Page 2 of20


1 corporation with its principal place of business at 16841 Armstrong Avenue,

2 Irvine, California 92606, its divisions and subsidiaries, and its successors and

3 assIgns.

4 2. "Rodney H. Burreson" ("Defendant Burreson") means Rodney H.

5 Burreson, individually and as an officer, director, manager, and owner of Roex.

6 3. "Mark Alexander" ("Defendant Alexander") means Mark Alexander,

7 individually and as an employee ofRoex.

8 4. Unless otherwise specified, "Defendants" means Roex, Inc., Burreson,

9 and Alexander.

10 5." Advertisement" means any written or verbal statement, illustration,

11 or depiction that is designed to effect a sale or to create interest in the purchasing

12 of goods or services, whether it appears in a book, brochure, newspaper, magazine,

13 pamphlet, leaflet, circular, mailer, book insert, letter, catalogue, poster, chart,

14 billboard, public transit card, point of purchase display, packaging, package insert,

15 label, film, slide, radio broadcast, television or cable television broadcast, video

16 news release, audio program transmitted over a telephone system, infomercial, the

17 Internet, e-mail, or in any other medium.

18 6. "Assisting others" means knowingly providing any of the following

19 services to any person or entity: (a) performing customer service for any person or

20 entity, including, but not limited to, outbound or inbound telemarketing, upselling,

21 cross-selling, handling customer complaints, credit card or debit card processing,

22 refund processing, web design and marketing, continuity program development, or

23 designing, preparing, or assisting in the preparation of product labeling or

24 packaging; (b) formulating or providing, or arranging for the formulation or

25 provision of, any sales script or any other advertising or marketing material for any

26 such person or entity; (c) leasing, renting, selling, or servicing customer lists; or (d)

27 performing advertising or marketing services or consulting services of any kind for

28 any such person or entity.

Page 3 of20


1 7. "Commerce" means as defmed in Section 4 of the FTC Act, 15 U.S.C.

2 § 44.

3 8. "Competent and reliable scientific evidence" means tests, analyses,

4 research, studies, or other evidence based on the expertise of professionals in the

5 relevant area, that has been conducted and evaluated in an objective manner by

6 persons qualified to do so, using procedures generally accepted in the profession to

7 yield accurate and reliable results.

8 9. "Covered product or service" means any dietary supplement, food,

9 drug, or device, including, but not limited to, B-Complex Combination,

10 Beta-'Sitosterol, Cell Talk, Chicken Sternal Collagen Type II, Coconut Oil,

11 Colostrum, the Daily Solutions Package, DHA, Essential Fatty Acids, the Far

12 Infrared Sauna, For Your Eyes Only, Hyaluronic Acid, MSM, Oleuropein, PC-95,

13 Vitamin C Mineral Ascorbates or any other health-related product, service, or

14 program, whether sold individually, in any combination, or as part of a program or

15 package.

16 10. "Specified products" means B-Complex Combination, Beta-

17 Sitosterol, Cell Talk, Chicken Sternal Collagen Type II, Coconut Oil, Colostrum,

18 the Daily Solutions Package, DHA, Essential Fatty Acids, the Far Infrared Sauna,

19 For Your Eyes Only, Hyaluronic Acid, MSM, Oleuropein, PC-95, and Vitamin C

20 Mineral Ascorbates.

21 11. "Endorsement" means as defmed in 16 C.F.R. § 255.0(b).

22 12. "Food," "drug," and "device" mean as defined in Section 15 of the

23 FTC Act, 15 U.S.C. § 55.

24 13. The term "including" in this Order means "without limitation."

25 14. The terms "and" and "or" in this Order shall be construed

26 conjunctively or disjunctively as necessary, to make the applicable phrase inclusive

27 rather than exclusive.

28

Page 4 0[20

Case 8:09-cv-00266-AG-MLG Document 10 Filed 05/20/2009 Page 5 of 20

, ....

Ca 8:09-cv-00266-AG-MLG Document 9-2 Filed 05/18/2009 Page 5 of 20

1 PROHIBITED REPRESENTATIONS

2 I.

3 IT IS HEREBY ORDERED that Defendants, directly or through any

4~~~~~ftm~~~~~~~~~~~~~~~~Mm~rrr~

6

7

8

9

10

11

Q2.Uofj~~~~~~'I'V(mt~'C'J1resmtmitveS0MIpitJYe~, and all persons or entities in

active concert or participation with them who receive actual notice of this Order by

personal service or otherwise, in connection with the manufacturing, labeling,

advertising, promotion, offering for sale, sale, or distribution of any covered

product or service, in or affecting commerce, are hereby permanently restrained

and enjoined from making any representation, in any manner, expressly or by

implication, including through the use of product names or endorsements, that:

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

A. Such product or service is effective in treating AIDS, Alzheimer's

disease, arthritis, asthma, autoimmune disorders, cancer, diabetes,

glaucoma, herpes, HIV, lupus, multiple sclerosis, rheumatoid arthritis,

tumors, or ulcers;

B. Such product or service reduces the risk of breast cancer, heart attack,

or stroke; or

c. Such product or service is effective in preventing Alzheimer's disease,

cancer, or Parkinson's disease,

unless the representation is true, non-misleading, and, at the time it is made,

Defendants Rodney H. Burreson, Mark Alexander, and Roex, Inc. possess and rely

upon competent and reliable scientific evidence that substantiates the

representation.

II.

IT IS FURTHER ORDERED that Defendants, directly or through any

corporation, partnership, subsidiary, division, trade name, or other device, and their

officers, agents, servants, representatives, employees, and all persons or entities in

active concert or participation with them who receive actual notice of this Order by

Page 5 of20


1 personal service or otherwise, in connection with the manufacturing, labeling,

2 advertising, promotion, offering for sale, sale, or distribution of any covered

3 product or service, in or affecting commerce, are hereby permanently restrained

4 and enjoined from making, or assisting others in making, any representation, in any

5 manner, expressly or by implication, including through the use of product names or

6 endorsements, about the absolute or comparative benefits, performance, efficacy,

7 safety, or side effects of such product or service unless the claim is true, non-

8 misleading, and, at the time it is made, Defendants Rodney H. Burreson, Mark

9 Alexander, and Roex, Inc. possess and rely upon competent and reliable scientific

10 evidence that substantiates the representation.

11 MISREPRESENTATION OF TESTS OR STUDIES

12 III.

13 IT IS FURTHER ORDERED that Defendants, directly or through any

14 corporation, partnership, subsidiary, division, trade name, or other device, and their

15 officers, agents, servants, representatives, employees, and all persons or entities in

16 active concert or participation with them who receive actual notice of this Order by

17 personal service or otherwise, in connection with the manufacturing, labeling,

18 advertising, promotion, offering for sale, sale, or distribution of any covered

19 product or service, in or affecting commerce, are hereby permanently restrained

20 and enjoined from misrepresenting, or assisting others in misrepresenting, in any

21 manner, expressly or by implication, including through the use of any product

22 names or endorsements, the existence, contents, validity, results, conclusions, or

23 interpretations of any test, study, or research.

24 FDA APPROVED CLAIMS

25 IV.

26 IT IS FURTHER ORDERED that:

27 A. Nothing in this Order shall prohibit Defendants from making any

28 representation for any drug that is permitted in labeling for such drug under any

Page 6 of20


1 tentative or final standard promulgated by the Food and Drug Administration, or

2 under any new drug application approved by the Food and Drug Administration;

3 and

4 B. Nothing in this Order shall prohibit Defendants from making any

5 representation for any product that is specifically pennitted in labeling for such

6 product by regulations promulgated by the Food and Drug Administration pursuant

7 to the National Labeling and Education Act of 1990.

8 LIST OF CONSUMERS

9 v. 10 IT IS FURTHER ORDERED that:

11 A. Defendants Roex and Burreson shall, no later than twenty (20)

12 calendar days after the date of entry of this Order, deliver to the Commission a list,

13 in the fonn of a sworn affidavit, of all customers who purchased the specified

14 products, on or after January 1,2004 through the date of entry of this Order, to the

15 extent that such purchasers are known to Defendants Roex and Burreson through a

16 diligent search of their records, including but not limited to computer files, sales

17 records, and inventory lists. Such list shall include each consumer's name and

18 address, the product( s) purchased, the total amount of moneys paid less any

19 amount credited for returns or refunds, and, if available, the consumer's telephone

20 number and e-mail address; and

21 B. Except as provided in this Order, Defendants Roex and Burreson, and

22 their officers, agents, servants, employees, and all other persons or entities, in

23 active concert or participation with them, who receive actual notice of this Order

24 by personal service or otherwise, are pennanently restrained and enjoined from

25 selling, renting, leasing, transferring, or otherwise disclosing the name, address,

26 telephone number, credit card number, bank account number, e-mail address, or

27 other identifying infonnation of any person who paid any money to either

28 Defendant Roex or Defendant Burreson, at any time prior to entry of this Order, in

Page 7 0[20


1 connection with the purchase of any specified product. Provided, however, that

2 Defendants Roex and Burreson may disclose such identifying information as

3 required in Subparagraph V.A above, or to any law enforcement agency, or as

4 required by any law, regulation, or court order.

5 MONETARY JUDGMENT AND REDRESS TO CONSUMERS

6 VI.


8 A. Judgment is hereby entered in favor of the Commission and against

9 Defendants, jointly and severally, in the amount of Twenty-Nine Million Dollars

10 and No Cents ($29,000,000.00) for redress to consumers. In addition, judgment is

11 hereby entered in favor of the Commission and against Defendants Roex and

12 Burreson, jointly and severally, in the amount of Five Million Six Hundred

13 Thousand Dollars and No Cents ($5,600,000.00) for redress to consumers.

14 Provided, however, that the judgment against Defendant Alexander shall be

15 suspended until further order of the Court, and provided further, that upon the

16 fulfillment of the payment obligations of Subparagraph VLB of this Order by

17 Defendants Roex and Burreson, the judgments against Defendants Roex and

18 Burreson shall be suspended until further order of the Court. The judgments

19 provided for herein shall be subject to reinstatement under the conditions set forth

20 in Paragraph VII of this Order.

21 B. Defendants Roex and Burreson have paid to the Commission the

22 amount of Three Million Dollars and No Cents ($3,000,000.00).

23

24

25

26

27

28

THE REST OF THIS PAGE IS INTENTIONALLY BLANK

Page 80f20


1 C. In the event of default on any obligation to make payment under this

2 Order, interest, computed pursuant to 28 U.S.C. § 196 I(a), shall accrue from the

3 date of default to the date of payment. In the event such default continues for ten

4 (10) calendar days beyond the date the payment is due, the judgments against

5 Defendants Roex and Burreson, jointly and severally, together with interest, shall

6 immediately become due and payable by Defendants Roex and Burreson.

7 Defendant Alexander shall not be liable for any obligation in the event of default

8 by Defendants Roex and Burreson.

9 D. All funds paid pursuant to this Order shall be deposited into a fund

10 administered by the Commission or its agents to be used for equitable relief,

11 including, but not limited to, redress to consumers and any attendant expenses for

12 the administration of such equitable relief. In the event that direct redress to

13 consumers is wholly or partially impracticable or funds remain after the redress is

14 completed, the Commission may apply any remaining funds for such other

15 equitable relief (including consumer information remedies) as it determines to be

16 reasonably related to Defendants' practices alleged in the Complaint. Any funds

17 not used for such equitable relief shall be deposited to the United States Treasury

18 as disgorgement. Defendants shall have no right to challenge the Commission's

19 choice of remedies under this Paragraph. Defendants shall have no right to contest

20 the manner of distribution chosen by the Commission. No portion of any payment

21 under the Judgment herein shall be deemed a payment of any fine, penalty, or

22 punitive assessment.

23 E. Defendants relinquish all dominion, control, and title to the funds

24 paid, and all legal and equitable title to the funds vests in the Treasurer of the

25 United States and in the designated consumers. Defendants shall make no claim to

26 or demand for return of the funds, directly or indirectly, through counselor

27 otherwise; and in the event of bankruptcy, Defendants acknowledge that the funds

28

Page 90f20


1 are not part of the debtor's estate, nor does the estate have any claim or interest

2 therein.

3 F. Defendants agree that the facts as alleged in the Complaint filed in

4 this action shall be taken as true without further proof in any bankruptcy case or

5 subsequent civil litigation pursued by the Commission to enforce its rights to any

6 payment or money judgment pursuant to this Order, including but not limited to a

7 non-dischargeability complaint in any bankruptcy case. Defendants further

8 stipulate and agree that the facts alleged in the Complaint establish all elements

9 necessary to sustain an action pursuant to, and that this Order shall have collateral

10 estoppel effect for purposes of, Section 523(a)(2)(A) of the Bankruptcy Code, 11

11 U.S.c. § 523(a)(2)(A).

12 G. In accordance with 31 U.S.C. § 7701, Defendants are hereby required,

13 unless they have done so already, to furnish to the Commission their taxpayer

14 identifying numbers and/or social security numbers, which shall be used for the

15 purposes of collecting and reporting on any delinquent amount arising out of

16 Defendants' relationship with the government.

17 H. Proceedings instituted under this Paragraph are in addition to, and not

18 in lieu of, any other civil or criminal remedies that may be provided by law,

19 including any other proceedings the Commission may initiate to enforce this

20 Order.

21

22

RIGHT TO REOPEN

VII.


24 A. The Commission's agreement to this Order and the Court's approval

25 are expressly premised upon the truthfulness, accuracy, and completeness of the

26 certified financial statements and supporting documents submitted to the

27 Commission as follows:

28

Page 10 0[20


1

2

3

4

5

6

7

8

1.

2.

3.

4.

Certified financial disclosures for Defendant Roex and all

addenda thereto, signed and dated August 6, 2008

Certified financial disclosures for Defendant Burreson and all

addenda thereto, signed and dated July 24, 2008;

Certified financial disclosures for Defendant Alexander and all

addenda thereto, signed and dated July 14,2008; and

Supplemental financial disclosures and all addenda thereto,

submitted August 14, 2008, August 22, 2008, September 3,

9 2008, November 3,2008, November 11,2008, and November

10 17,2008.

11 Each Defendant stipulates that all of the materials such Defendant submitted are

12 truthful, accurate, and complete. These documents contain material information

13 upon which the Commission relied in negotiating and agreeing to the terms of this

14 Order.

15 B. If, upon motion by the Commission, a Court determines that

16 Defendants Roex or Burreson made a material misrepresentation or omitted

17 material information concerning its or his fmancial condition, then the Court shall

18 reinstate the applicable suspended judgment amount (i.e., $34,600,000.00) entered

19 against Defendants Roex and Burreson in Subparagraph VI.A of this Order.

20 Provided, however, that Defendant Alexander shall not be liable for any material

21 misrepresentations or omitted material information concerning Defendant Roex's

22 or Defendant Burreson's fmancial conditions. Should the Court reinstate the

23 applicable suspended judgment amount entered against Defendants Roex and

24 Burreson in Subparagraph VI.A of this Order, Defendants Roex and Burreson shall

25 be entitled to offset this amount by any sums already paid under this Order. Any

26 such reinstated judgment shall become immediately due and payable by

27 Defendants Roex and Burreson, and interest computed at the rate prescribed under

28 28 U.S.C. § 196 l(a) shall immediately begin to accrue on the unpaid balance.

Page 11 0[20


1 Provided, however, that in all other respects this Order shall remain in full force

2 and effect unless otherwise ordered by the Court. For purposes of this Paragraph,

3 and any subsequent proceedings to enforce payment, including, but not limited to,

4 a nondischargeability complaint filed in a bankruptcy proceeding, Defendants

5 Roex and Burreson agree not to contest any of the allegations in the Commission's

6 Complaint.

7 C. If, upon motion by the Commission, a Court determines that

8 Defendant Alexander made a material misrepresentation or omitted material

9 information concerning his financial condition, then the Court shall reinstate the

10 applicable suspended judgment amount (i.e., $29,000,000.00) entered against him

11 in Subparagraph VI.A of this Order. Should the Court reinstate the applicable

12 suspended jUdgment amount entered against Defendant Alexander in Subparagraph

13 VI.A of this Order, Defendant Alexander shall be entitled to offset this amount by

14 any sums already paid by Defendants Roex and Burreson under this Order. Any

15 such reinstated judgment shall become immediately due and payable by Defendant

16 Alexander, and interest computed at the rate prescribed under 28 U.S.c. § 1961(a)

17 shall immediately begin to accrue on the unpaid balance. Provided, however, that

18 in all other respects this Order shall remain in full force and effect unless otherwise

19 ordered by the Court. For purposes of this Paragraph, and any subsequent

20 proceedings to enforce payment, including, but not limited to, a

21 nondischargeability complaint filed in a bankruptcy proceeding, Defendant

22 Alexander agrees not to contest any of the allegations in the Commission's

23 Complaint.

24 D. Proceedings instituted under this Paragraph are in addition to, and not

25 in lieu of, any other civil or criminal remedies that may be provided by law,

26 including any other proceedings the Commission may initiate to enforce this

27 Order.

28

Page 120[20


1 COMPLIANCE MONITORING

2 ~II.

3 IT IS FURTHER ORDERED that, for purposes of monitoring and

4 investigating compliance with any provision of this Order:

5 A. Within ten (10) calendar days of receipt of written notice from a

6 representative of the Commission, Defendants each shall submit additional written

7 reports, sworn to under penalty of perjury; produce documents for inspection and

8 copying; appear for deposition; and/or provide entry during normal business hours

9 to any business location in such Defendant's possession or direct or indirect

10 control to inspect the business operations;

11 B. In addition, the Commission is authorized to monitor compliance with

12 this Order by all lawful means, including, but not limited to the following:

13 1. Obtaining discovery from any person, without further leave of the

14 Court, using the procedures prescribed by Fed. R. Civ. P. 30, 31, 33,

15 34, 36, and 45;

16 2. Posing as customers and clients to any Defendant, employees of any

17

18

19

20 C.

Defendant, or any other entity managed or controlled in whole or in

part by any Defendant, without the necessity of identification or prior

notice; and

Defendants shall permit representatives of the Commission to

21 interview any employer, consultant, independent contractor, representative, agent,

22 or employee who has agreed to such an interview, relating in any way to conduct

23 subject to this Order. The person interviewed may have counsel present.

24 Provided, however, that nothing in this Order shall limit the Commission's

25 lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act,

26 15 U.S.C. §§ 49, 57b-l, to obtain any documentary material, tangible things,

27 testimony, or information relevant to unfair or deceptive acts or practices in or

28 affecting commerce (within the meaning of 15 U.S.C. § 45(a)(1)).

Page 13 0[20


1 COMPLIANCE REPORTING BY DEFENDANTS

2 IX.

3 IT IS FURTHER ORDERED that, in order that compliance with the

4 provisions of this Order may be monitored:

5 A.

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

For a period of three (3) years from the date of entry of this Order,

1. Defendant Burreson and Defendant Alexander each shall notify

the Commission of the following:

a. Any changes in his residence(s), mailing addressees), and

telephone number( s) within ten (10) calendar days of the

date of such change;

b. Any changes in his employment status (including self

employment) and any change in his ownership in any

business entity, within ten (10) calendar days of such

change. Such notice shall include the name and address

of each business that the Defendant is affiliated with,

employed by, creates or forms, or performs services for;

a statement of the nature of the business; and a statement

of the Defendant's duties and responsibilities in

connection with the business or employment; and

c. Any changes in the Defendant's name or use of any

aliases or fictitious names; and

2. Defendants Roex and Burreson shall notify the Commission of

any proposed change in the corporate structure of Defendant

Roex or any business entity that Defendants Roex or Burreson

directly or indirectly controls, or has an ownership interest in,

that may affect compliance obligations arising under this Order,

including but not limited to a dissolution, assignment, sale,

merger, or other action that would result in the emergence of a

Page 140[20


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3.

successor entity; the creation or dissolution of a subsidiary,

parent, or affiliate that engages in any acts or practices subject

to this Order; the filing of a bankruptcy petition; or a change in

the corporate name or address, at least thirty (30) calendar days

prior to such change, provided that, with respect to any

proposed change in the business entity about which Defendants

Roex or Burreson learns less than thirty (30) calendar days

prior to the date such action is to take place, Defendants Roex

and Burreson shall notify the Commission as soon as is

practicable after obtaining such knowledge.

Defendant Alexander shall notify the Commission of any

business entity that he directly or indirectly controls, or has an

ownership interest in, or of any proposed change in such

business entity, that may affect compliance obligations arising

under this Order, including but not limited to a dissolution,

assignment, sale, merger, or other action that would result in the

emergence of a successor entity; the creation or dissolution of a

subsidiary, parent, or affiliate that engages in any acts or

practices subject to this Order; the filing of a bankruptcy

petition; or a change in the corporate name or address, at least

thirty (30) calendar days prior to such change, provided that,

with respect to any proposed change in the business entity

about which Defendant Alexander learns less than thirty (30)

calendar days prior to the date such action is to take place,

Defendant Alexander shall notify the Commission as soon as is

practicable after obtaining such knowledge.

B. Sixty (60) calendar days after the date of entry of this Order,

Defendants each shall provide a written report to the Commission, sworn to under

Page 15 of20


1 penalty of perjury, setting forth in detail the manner and form in which they have

2 complied and are complying with this Order. This report shall include, but not be

3 limited to:

4 1. F or Defendant Burreson and Defendant Alexander:

5 a. The then-current residence addresses, mailing addresses, and

6 telephone numbers of the Defendant;

7 b. The then-current employment and business addresses and

8 telephone numbers of the Defendant, a description of the

9 business activities of each such employer or business, and the

10 title and responsibilities of the Defendant, for each such

11 employer or business. For purposes of this Paragraph,

12 "employment" includes the performance of services as an

13 employee, consultant, or independent contractor; and

14 "employers" include any individual or entity for whom the

15 Defendant performs services as an employee, consultant, or

16 independent contractor;

17 c. A copy of each acknowledgment of receipt of this Order

18 obtained by the Defendant pursuant to Paragraph X; and

19 d. Any other change required to be reported under Subparagraph

20 A of this Paragraph.

21 2. For Defendant Roex:

22 a. A copy of each acknowledgment of receipt of this Order

23 obtained by each Defendant pursuant to Paragraph X;

24 and

25 b. Any other changes required to be reported under

26 Subparagraph A of this Paragraph.

27 C. For the purposes of this Order, Defendants shall, unless otherwise

28 directed by the Commission's authorized representatives, send by overnight

Page 16 of20


1 courier all reports and notifications required by this Order to the Commission, to

2 the following address:

3 Associate Director for Enforcement Federal Trade Commission

4 600 Pennsylvania Avenue, N.W. Washington, D.C. 20580

5 Re: FTC v. Roex, Inc., et aI., SAC V09-0266-AG (MLGx)

6 Provided that, in lieu of overnight courier, Defendants may send such reports or

7 notifications by first-class mail, but only if Defendants contemporaneously send an

8 electronic version of such report or notification to the Commission at:

9 [email protected].

10 D. For purposes of the compliance reporting required by this Paragraph,

11 the Commission is authorized to communicate directly with any

12 Defendant.

13 RECORD KEEPING PROVISIONS

14 x. 15 IT IS FURTHER ORDERED that, for a period of six (6) years from the

16 date of entry of this Order, Defendant Roex and any business engaged in the sale

17 of any covered product or service in which Defendant Burreson or Defendant

18 Alexander is a majority owner or otherwise directly or indirectly controls the

19 business, and their agents, employees, officers, corporations, successors, and

20 assigns with actual notice of this Order, are hereby restrained and enjoined from

21 failing to create and retain the following records:

22 A. Accounting records that reflect the cost of covered products or

23 services sold, revenues generated, and disbursement of such revenues;

24 B. Personnel records accurately reflecting: the name, address, and

25 telephone number of each person employed in any capacity by such business,

26 including as an independent contractor; that person's job title or position; the date

27 upon which the person commenced work; and the date and reason for the person's

28 termination, if applicable;

Page 17 of20


1 C. Customer files containing the names, addresses, telephone numbers,

2 dollar amounts paid, quantity of items or services purchased, and description of

3 items or services purchased, to the extent such information is obtained in the

4 ordinary course of business;

5 D. Complaints and refund requests (whether received directly, indirectly,

6 or though any third party) and all records showing any responses to those

7 complaints or requests;

8 E. Copies of all advertisements, promotional materials, sales scripts,

9 training materials, or other marketing materials utilized in the advertising,

10 marketing, promotion, offering for sale, distribution, or sale of any product,

11 service, package, or program covered by this Order;

12 F. All materials that were relied upon in making any representations

13 contained in the materials identified in Subparagraph X.E above, including all

14 documents evidencing or referring to the accuracy of any claim therein or to the

15 benefits, performance, efficacy, safety, or side effects of any product, service,

16 package, or program, including but not limited to all tests, reports, studies,

17 demonstrations, as well as evidence that confirms, contradicts, qualifies, or calls

18 into question the accuracy of such claims regarding the benefits, performance,

19 efficacy, safety, or side effects of such product, service, package, or program; and

20 G. All records and documents necessary to demonstrate full compliance

21 with each provision of this Order, including but not limited to, copies of

22 acknowledgments of receipt of this Order and all reports submitted to the

23 Commission pursuant to this Order.

24 DISTRIBUTION OF ORDER

25 XI.

26 IT IS FURTHER ORDERED that, for a period of three (3) years from the

27 date of entry of this Order, Defendants shall deliver copies of the Order as directed

28 below:

Page 18 of20


. . Ca 8:09-cv-00266-AG-MLG Document 9-2 Filed 05/18/2009 Page 19 of 20

1 A. Defendant Roex shall deliver a copy of this Order to each of its

2 principals, officers, directors, and managers. Defendant Roex also shall deliver a

3 copy of the Order to all of its employees, agents, and representatives who engage

4 in conduct related to the subject matter of this Order. For current personnel,

5 delivery shall be within five (5) business days of service of this Order upon

6 Defendants. For new personnel, delivery shall occur prior to their assuming their

7 responsibilities.

8 B. F or any business that Defendant Burreson or Defendant Alexander

9 controls, directly or indirectly, or in which such individual Defendant has a

10 majority ownership interest, such individual Defendant shall deliver a copy of this

11 Order to all of the principals, officers, directors, and managers of that business, and

12 to all employees, agents, and representatives of that business who engage in

13 conduct related to the subject matter of this Order. For current personnel, delivery

14 shall be within five (5) business days of service of this Order upon Defendants. For

15 new personnel, delivery shall occur prior to their assuming their responsibilities.

16 C. For any business where Defendant Burreson or Defendant Alexander

17 is not a controlling person of the business but otherwise engages in conduct related

18 to the subject matter of this Order, such individual Defendant shall deliver a copy

19 of this Order to each of the principals and managers of such business before

20 engaging in such conduct.

21 D. Defendants shall secure a signed and dated statement acknowledging

22 receipt of this Order, within thirty (30) calendar days of delivery, from each person

23 receiving a copy of the Order pursuant to this Paragraph.

24

25

26

27

28

THE REST OF THIS PAGE IS INTENTIONALLY BLANK.

Page 19 of20


. . Ca 8:09-cv-00266-AG-MLG Document 9-2 Filed 05/18/2009 Page 20 of 20

1 ACKNOWLEDGMENT OF RECEIPT OF ORDER BY DEFENDANTS

2 }(II.

3 IT IS FURTHER ORDERED that each Defendant, within five (5) business

4 days of receipt of this Order as entered by the Court, shall submit to the

5 Commission a truthful sworn statement acknowledging receipt of this Order.

6 RETENTION OF JURISDICTION

7 }(III.

8 IT IS FURTHER ORDERED that this Court shall retain jurisdiction of

9 this matter for purposes of construction, modification, and enforcement of this

10 Order.

IT IS SO ORDERED. ~

12 DATE: ~flo.~ ~,,'20;,0~~"~ 13

11

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ROEXlI053395/6665439v.l

Page 20 of20

-

Documents

Ca 8:09-cv-00266-AG-MLG Document 9-2 Filed Page 1 of 20 · Case 8:09-cv-00266-AG-MLG Document 10 Filed 05/20/2009 Page 3 of 20 Ca 8:09-cv-00266-AG-MLG Document 9-2 Filed 05/18/2009